Assessing Long-Term Care Options

The Federal Long Term Care Insurance Program obviously is not the only form of long-term care available. An individual can purchase such coverage on the open market and may qualify for group rates through membership in some organization.

Long-term care insurance policies are not standardized by law as are Medicare supplemental (Medigap) policies, making comparisons among different policies difficult.

Further, the many options that long-term care policies provide for individuals to choose among to create a policy to meet their perceived needs and financial situations can complicate a purchasing decision.

Many checklists exist to help individuals considering a policy purchase determine the options they should buy to create a policy that best fits their needs. Among the questions an individual should try to answer when purchasing a long-term care insurance policy are:

• What is the probability that long-term care services will be needed in the future and for how long will they be needed?
• How much coverage can the individual afford, will the premium remain affordable over time, and will the coverage provide sufficient services?
• Should the policy cover only nursing home care, or also home care, or other alternatives such as assisted living?
• Should the individual purchase a less expensive policy that has a waiting period before the policy begins paying for services received?
• What level of coverage for specific services should be purchased? For example, what per day amount (such as $100 or $130 per nursing home day) should be stipulated for nursing home care? For home health, what per month or per visit amount is adequate? Should total coverage be provided for three years, five years or for lifetime coverage?
• Should inflation protection be purchased (for an additional 25 to 40 percent of the premium) to preserve more of the policy’s future value?
• Should optional nonforfeiture protection be purchased (for an additional 10 to 100 percent of the premium) to allow the purchaser to retain some coverage if he or she stops making premium payments?